Pay Structure of Part-Time Jobs:How to Calculate Salary and Tax

We all want to know how much we can get on the payday advance, especially for those people who are waiting for the money to pay for house rent or credit card. In the case of part-time jobs, the monthly salary is typically the hourly wage multiplied by the number of working hours in a month if paid on an hourly wage system, or daily wage multiplied by the number of working days in a month if paid on a daily wage system.

But wait a moment, why is the amount on the payroll less or more than we estimated? And what those items mean on the payroll? It is time for us to learn the pay structure to get answers. With this knowledge, we can not only predict and plan our salary, but also find out any possible miscalculations on our payrolls.

How to calculate monthly salary

Basically, net salary = salary - taxes.

And, salary = basic salary + allowances + salary for annual paid leaves.

And, allowances = overtime allowance + night work allowance + holiday allowance +....

Some employers also provide commute allowance for part-timers. As a majority of part-time jobs are paid hourly, let's start from how to calculate salary for an hourly paid part-time job.

Basic salary

This means the salary for a worker's work during Working Hours, which is stipulated by the Labor Standards Act as can't be more than 8 hours per day for each day of the week, or more than 40 hours per week. It should be noted that Rest Periods are excluded from Working Hours.

As said before, basic salary = hourly wage x Working Hours. So if a part-time worker worked 22 days per month and 4 hours per day, then basic salary = hourly wage x 4 x 22.

Those working less than 1 hour should be paid per minute basis according to the law, while many employers calculate per 5 or 15 minutes basis for convenience.

Overtime allowance

If a worker works more than Working Hours, i.e. more than 8 hours per day for each day of the week, or more than 40 hours per week, the employer must pay allowances for those additional hours, which are called Overtime Work.

Overtime allowance = overtime hourly wage x overtime hours.

Overtime hourly wage must be not less than 1.25 times of regular hourly wages. For example if the hourly wage is 1000 yen, then the Overtime Work should be paid more than 1250 yen per hour.

Night work allowance

Night Work between 10 p.m. and 5 a.m., or between 11 p.m. and 6 a.m. for certain areas or time of year must be paid night work allowance, which must be not less than 1.25 times of regular hourly wages.

Night work allowance = night work hourly wage x night work hours.

Please note that if those night work hours are also overtime work, then overtime allowance and night work allowance should be paid together for those hours, which should be 1.5 times of regular hourly wages.

Holiday allowance

The Labor Standards Act stipulates that employers must provide a worker at least one day off per week, or 4 days off or more over any four-week, which is called "Statutory Days Off" or holiday. If a worker works at a holiday, holiday allowance should be paid.

Holiday allowance = holiday hourly wage x work hours on holiday. Holiday hourly wage must be not less than 1.35 times of regular hourly wages.

Salary for annual paid leaves

All these above basic salary and allowances are paid for work, actually a worker can also get salary for not-working annual paid leaves. If a part-timer has worked for more than 6 months including renewal of contacts and has worked on at least 80% of the total working days, the worker should be granted annual paid leave of 10 working days.

Salaries for these paid leaves are often calculated as equal to the salary paid for working days. For example if a part-timer works 4 hours per day and 1000 yen per hour, then the salary for annual paid leaves will be 4000 yen per day.

How to calculate monthly tax

There are also cases that part-time workers have to pay tax, which will be withheld from salaries. Or part-time workers who have joined the National Pension also need to pay a premium monthly.

About tax

Though many part-time workers don't earn enough to pay for taxes, like working students, or dependant housewives, but for other part-timers earning more than around 1 million yen per year, they should take a concern for the following two kinds of taxes:

・Income tax

This is paid to the nation and will be calculated based on the taxpayer's estimated annual income at the beginning of a fiscal year and be withheld from the taxpayer's monthly salary.

Income tax = (annual salary income - Deductions) x Income Tax Rate. For part-time workers, Deductions include 380,000 yen million yen as Basic Personal Exemption, and 650,000 yen as Salary Income Deduction, 270,000 yen as working student deduction, etc. So normal part-timers don't need to pay income tax if annual income is less than 1,030,000 yen, while 1,300,000 yen for part-time working students.

Income Tax Rate ranges from 5% to 45% increasing with taxable gross income.

・Resident tax

This is paid to the prefecture and municipality where the taxpayer is living.

Resident Tax = Per Income Levy + Per Capita Rate. While Per Capita Rate is around 5,000 yen for each prefecture, Per IncomeLevy = (annual salary income - Deductions) x Resident Tax Rate.

Deductions for Resident tax have the same items as Income tax, but the amount is slightly different, which goes to a total of over 1,000,000 yen per year for normal part-timers, and 1,260,000 yen for part-time working students.

Resident Tax Rate is around 10% for each prefecture.

About National Pension

The monthly premium for National Pension is fixed per year and determined by the year's cost-of-livings and average wages.

When is the pay day

Though the pay day varies from employer to employer, it tends to be the end of a month or a day that is a multiple of 5 or 10 in Japan.

Some recommended good-pay part-time jobs

You should have realized that you can earn more with night work or working on holidays. Here are some selected part-time jobs easier to get these good-pay shifts.

Staff of Convenience Stores

24 hours convenience stores provide the most flexible shifts for part-time workers. If you schedule your shift at late-night or early morning, or holidays, then you can get more salary with late-night and holiday allowances.

Cleaning and building maintenance

Facilities like shopping malls or hospitals also need people to do cleaning at holidays, which makes a highly hourly wage with holiday allowance for part-timers.

Hall and kitchen staff at restaurants

Late night and holidays may be the busiest season for restaurants and Isakayas. Working part-time as hall or kitchen staff at restaurants and aiming your shift at these allowances will bring you a very good pay.